Sunday 20 May 2012

Contents of module

Broadband network interconnection issues

In Hong Kong’s PSTN market there are two types of interconnection, Type I and Type II. Type I is interconnection at the exchange or in the local loop, Type II is unbundling of the local loop.

As there is no domestic long distance in Hong Kong, interconnection in trunk networks does not arise, but Hong Kong has liberalized the broadband market, licensed new fixed wireless networks, external facilities and service providers, satellite as well as broadcasters using cable and telecommunications networks, and there is now a demand for backhaul capacity. Under these changing circumstances the concept of interconnection at the trunk level becomes relevant.

The fourth point of interconnection comes at the potential bottleneck facility of the in-building coaxial cable distribution system (IBCCDS) which runs from the roof to the ground floor of most of Hong Kong’s high-rise commercial and residential buildings.

IBCCDSs carry signals from free-to-air terrestrial television, from satellite master antenna television systems (SMATVs), from cable television, from closed circuit television (CCTV) security systems and from fixed wireless operators. The older systems have limited capacity, and many will require upgrading to carry the increased number of channels that digital broadcasting will bring about. (See OFTA module on Spectrum Management on this website for more details. See also the Consultation Paper OFTA issued in March 1999, ‘Frequency Layout Plan of In-Building Coaxial Cable Distribution Systems’, which discusses the capacity and frequency management problems in detail.)

a) Type I

Diagram 1 is used to illustrate the points of interconnection for type I and type II interconnection in the case of ITU G.992.2 (G.Lite) ‘Splitterless’ ADSL/DMT. On the left side of the diagram are the customers' premises. In the centre of the diagram are the telecommunications networks providing end-to-end connectivity, and on the right hand side are the ISP gateways to the Internet and Web-based content and applications.

In effect there are two levels of interconnection, the horizontal kind which links different telecommunication networks to each other to provide the customer with choice of network, and the vertical kind which links the ISPs, and therefore the Internet, to customers through each and any of the telecommunication networks. Narrowband interconnection has always been about horizontal interconnection, but broadband adds the vertical as a new dimension.

Another way of seeing this, much closer to narrowband traditions, is to distinguish between interconnection between carriers on the one hand, and wholesaling capacity to service providers on the other. This distinction implies different rights of interconnection, where carrier-to-carrier may be mandatory but wholesaling may not be, and different charging principles, where carrier-to-carrier may be regulated and wholesaling may not be, or if it is then it may be regulated on a different basis.

But there is one difference between the narrowband and broadband contexts, and that is that broadband networks largely exist to provide access to the public Internet, or to private intranets, and Web-based services. Narrowband networks, on the other hand, exist largely to provide basic PSTN services and value-added services which in many cases are intelligent network extensions of the PSTN itself, such as call-forwarding and voice mailbox. This difference is really a difference of business model, and will determine what drives broadband investments in the future.

What this means for Type I interconnection is that policy must consider the need for both types of interconnection. Open access, or vertical interconnection, to the Internet and other broadband service providers is essential for customer choice, and attempts by carriers to block access may be construed as anti-competitive. It is also probably self-defeating in a broadband world because open access is mostly likely to drive the market for content and applications, and the carrier business is a derived demand of that traffic. And, at the end of the day, the Internet itself is a global means of interconnection.

Global interconnection through the Internet is a guarantee of the any-to-any principle, but it may not be a guarantee of efficiency. For example, if local customers demand access to local sites or wish to send multimedia or other content requiring broadband capacity to someone else in Hong Kong who is connected to another network, it makes little sense to route the traffic across the Pacific Ocean to the US and then back again.

Because the Internet grew up outside the traditional telecommunications world there is no international system of accounting rates, so ISPs in Asia are pressured by market forces to pay for both ends of private leased circuits to the US and that adds to cost. It therefore makes more sense to route local traffic locally and regional traffic regionally, but until these traffic volumes reach critical mass carriers and ISPs may be reluctant to strike their own commercial interconnection arrangements. (See the reference to Internet eXchanges in Part 5).

OFTA has therefore provisionally proposed to require Type I interconnection between carriers who are expected to reach their own commercial arrangements, and to require open access to service providers but on a wholesaleing basis. There will be, for example, no rights of co-location of equipment for ISPs.

In diagram 1 co-location is illustrated at the point where ATM2, the switch of network 2, interconnects with the digital subscriber line access module (DSLAM) of network 1 on the exchange side of the DSLAM. Co-location can be either physical, where network 2 slots its own module into the DSLAM rack of network 1, or virtual where network 2 buys modules from network 1.

The alternative case is where network 2 builds out its own broadband customer access network and installs its own DSLAM. Interconnection between telecommunications networks using an ATM platform then becomes a matter of direct connection between ATM 1 and ATM 2. The ATM architecture is the ITU-T standard for implementing broadband ISDN and multimedia services and the existing IP networks in Hong Kong rely upon the public ATM networks as transport backbones. To quote from OFTA’s 14 June Paper,

The ATM Forum Broadband ISDN Inter-carrier Interface (B-ICI) Specification, Version 2.0, can support inter-carrier services based on switched virtual connections (SVC). Subject to the availability of commercial products of B-ICI in the market, the TA’s ultimate goal is that all public ATM core networks should be interconnected with each other in order to achieve “any-to-any” connectivity. For the interconnection of broadband services through other means such as the Hong Kong Internet Exchange (HKIX) or regional/international backbones, the quality of services and transmission bandwidth achievable for end-to-end broadband connections to service platforms of different Internet Service Providers (ISPs) remain to be seen. If effective interconnection for broadband services (technically and economically feasible and efficient) are not available through the above means, the TA considers that it may be necessary to have direct physical interconnection between broadband networks (Type I interconnection).

OFTA will continue to examine these issues with the help of the Telecommunications Standards Advisory Committee (TASC).

b) Type II and in-building access

If the interconnection point from network 2 is on the customer side of the DSLAM of network 1, then local loop unbundling has occurred and the customer’s line has been fully or partially seized by network 2. The nature of ITU G.992.2 (G.Lite) is that it works best at short distances from the customer’s premises if speeds of 1.5 Mbps are to be achieved, so DSLAMs will be placed in building basements or nearby accommodation. Type II interconnection is likely to take place either at these points, or at intermediate junctions, or even at distribution points on individual floors.

In diagram 1, the DSLAM is assumed to be part of network 1, but in practice it could be owned by the property management company of the customer’s building, in which case interconnection of type II would be an arrangement directly between the management company and each network. A licence would be required by the management company to operate a wide area network on behalf of the tenants of the property, and regulation may be required to prevent anti-competitive behaviour from a management company giving preferential access to a particular carrier.

Unlike narrowband type II unbundling, broadband unbundling involves variable bandwidth capacity. It may be that the request for interconnection is for partial bandwidth capacity rather than full bandwidth capacity, and OFTA’s preliminary view supports the availability of both. Full bandwidth capacity opens the door to a range of xDSL technologies, and in the case of partial bandwidth capacity OFTA favours a lower limit rather than an upper limit to safeguard the continuation of PSTN services over shared lines.

xDSL over the telecommunications customer access network is not the only means of broadband transmission into buildings. Satellite and fixed wireless, digital terrestrial transmission (DTT) of television signals and cable television and cable modem represent alternative means of broadband service delivery, and reference was made above to the IBCCDSs which provide the in-building block wiring circuitry.

The ownership of the in-building block wiring is usually with the building property owner, so interconnection arrangements are by commercial negotiation and depend largely upon what the building tenants wish to pay for and receive. The role of OFTA is more focused at this stage upon the issue of regulating the frequency allocations and assignments of the IBCCDSs and developing a database of systems that upgrade to carry digital and broadband services. (See module on Spectrum Management).

c) Open Access and Conditional Access

One further form of interconnection arises in the case of cable television.

The licence conditions of Hong Kong Cable TV Ltd require open access. Currently four of the 36 channels delivered by hybrid fibre coaxial cable carry the programmes of the free to air terrestrial broadcasters, and any programme packager or content provider can come to their own commercial agreement with HKC.

FTNS operator New T&T, a company affiliated to HKC, will offer telephony services over HKCTV’s network for residential customers, but this has to be a non-exclusive and non-prejudicial arrangement. HKC is offering cable modem services for fast Internet access, and is required to offer channels to other service operators. The issue of developing and using an open standard for the set-top box which provides customers conditional access to television and TV-PC services, is an associated concern, and is examined in the OFTA module on Spectrum Management.